Why is everyone talking about water charges today?

As the March 31st deadline for the controversial household charge creeps ever closer, the news is awash with the next big hit on the taxpayer. Dare we say it? The introduction of water charges.

Okay, so at the minute we have the €100 household charge, we also have mortgages, bin charges and a countless number of other things to worry about. What exactly is the new water charge? When will it come into effect? And, the most important question of all, how much will it cost you?

Alright. So why is the water charge in the news today?

Despite the fact that the household charge is due on March 31st, the media is focussed on the water charge today because a major new report that has been prepared for the Government has managed to shed a little more light on the topic.

At the moment a lot of people (even the Government itself) are unclear about what will be involved with the new water charge – we don’t know how much it is likely to cost, how people will be charged or if it will depend on how much water a household uses. There are a lot of questions that need to be answered. However this report has given us a better idea of what to expect.

So what can we expect? How many households will be affected by it?

There are 1.35million households in Ireland at present. Of this number, a massive 90 per cent of households will be forced into paying the mandatory water charges. The enforcement of these charges is expected to begin in January 2014.

How much will it cost?

While the rates are not yet known, we do know that households will be forced to pay VAT for their water. This means that at least 13.5 per cent to the overall charge.

Wait – we have to pay VAT too?!

Yes. According to this new report for the Government, households will have to pay VAT in addition to the original charge. This is because a private company, known as Irish Water, will be charging for the services. Simply put, our Government will no longer be responsible for providing water to us, so we have to pay Irish Water for the privilege of supplying our homes with liquid.

Surely this means that the days of water being turned off in winter are over? If we’re paying for it will we get special treatment?

You’d like to think that, but no, this is not the case. The report, which was prepared by Price Waterhouse Coopers (PWC) warned that homes which currently experience problems with their water supply, such as having it turned off for long periods during winter, will not be availing of a better service despite the fact that they’ll be paying for it.

Oh and, according to the report it “may not be possible” to improve the quality of a drinking water because there is a massive amount of restoration work needed to bring services up to a basic standard.

Last year alone there were 541 instances where water quality actually posed a risk to public health.

How much is all of this going to cost the Government then?

According to the report, it will cost at least €10billion to bring Ireland’s water quality up to the EU standard. However, before this can be done, there is a backlog of important works needed which will cost at least €500million.

And what about these water meters that everyone was talking about a while ago?

There’s still not much information available about the introduction of water meters, although the report says that of the 1.35million homes that are going to be taxed, at least 300,000 will pay a flat-rate charge – this is because apartments and terraced homes are too expensive to put a meter in.

That being said the report also says that the water meters themselves may have to be replaced “on a regular basis.” And it is not yet clear if the Government or the household will have to pay the estimated €500 cost of the water meter itself.

So first property taxes now water taxes. Is there anything else?

Not for the foreseeable future, although we get the feeling that this water charge is something that could also escalate out of control like the dreaded household charge.